A hospital, a church, a government office: At each site, someone stands accused in recent months of being caught with a hand in the till.

Over the course of three years, until Feb. 1, 2017, former Lourdes Hospital worker Shelley Allegrino pocketed more than $10,000 from a hospital employees' charity organization, officials say.

Nathan J. Walz, former treasurer for Grace Lutheran Church in Vestal, was arrested in August on suspicion of writing checks from the church's bank account to his own to the tune of $250,000 over a five-year period.

Fraud or embezzlement crimes around the Southern Tier are not a new problem, but in recent years, cases have illustrated the vulnerability of different nonprofits or other agencies that rely heavily on volunteers or lack enough safeguards to protect their finances. Frequently, law enforcement officials say, a lack of checks and balances within the organization enables criminals to empty the coffers.

Prosecutors say it's easy to forget why this can be a problem until it's too late: These types of thefts rarely come as a one-time "big hit" and are typically committed quietly over the span of years. If arrested in these cases, a perpetrator can face felony grand larceny charges.

"People will commit the crimes they think they can get away with," said Broome County District Attorney Steve Cornwell, whose office hosted a fraud-prevention seminar Sept. 27 that drew nearly 100 people in Endwell. "We'd really like to prevent that from happening in the first place, because a lot of times, there's no money to give back."

But there are steps that nonprofits and similar agencies can take to avoid becoming victims.

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Authorities say there are a few factors that help enable people to commit fraud/embezzlement, but safeguards including checks and balances can prevent it.
Anthony Borrelli / Staff video

Mark Mushalla, a certified public accountant from Vestal, said fraudsters can become adept at ways to manipulate the books and hide expenditures. For nonprofits or other organizations, he said, the fraud perpetrator is usually someone who exercises largely unfettered access to finances.

"It's always the person you trust," Mushalla said of potential fraudsters during the Sept. 27 seminar in Endwell. "They have everything, they have access and keys to the castle. You want to control access to those books and records."

Not a new problem

Though there has been a recent spate of arrests in the Southern Tier related to this type of fraud, the problem is a recurring one.

A review of news archives over the past three years show numerous examples of crimes involving embezzlement accusations around the Southern Tier:

Former Village of Millport treasurer Dawn Haverley was accused in September of stealing $4,000 in public funds, according to the state comptroller's office. She was appointed Millport treasurer in 2006 but was suspended in 2015 after the comptroller's audit and investigation.

Ithaca resident Irene Dixon was ordered in April 2016 to pay full restitution after stealing more than $31,000 from her former employers at Classen Home Health Associates. For two years, court papers say, she stole money by falsifying time sheets between April 19, 2012 through Oct. 30, 2014.

Lisa Stone, formerly treasurer for Pulteney Fire District No. 2 in Steuben County, admitted in May 2015 to stealing more than $5,000 in public funds by falsifying vouchers and paying herself an additional illegal salary.

Stephanie Burlew, a former senior account clerk typist for the City of Corning's finance office admitted in August 2014 to grand larceny after a state audit found she stole as much as $11,000 in cash, including $5,000 from parking fines.

In most cases, thefts were uncovered through separate audits or a closer inspection of the finances.

'Start looking deeper'

When someone is trying to conceal the fraud being committed, there always seems to be a reason not to conduct a routine audit.

"I haven't had time," is a commonly raised excuse by the person who's stealing, said Darryl Lindsay, a 24-year member of the Vestal Police Department now Regional Security Manager for M&T Bank investigating fraud.

And when the culprit brings up that excuse, Lindsay said, an employer or organization head might just think: "We had that meeting" and we just discussed the finances — time to move on to something else.

That's a mistake, he said.

"You have to start looking deeper," Lindsay said, urging agencies to keep an open communication when it comes to money management. "If you're on a board, if you're in charge of your association, understand what is normal activity for your finances."

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Darryl Lindsay, a former Vestal police officer who currently works as Regional Security Manager for M&T Bank investigating fraud, speaks during a seminar Sept. 27, 2017 in Endwell.(Photo: Anthony Borrelli / Staff photo)

Creating a series of guidelines for spending, especially with credit cards, can also make it more difficult for a perpetrator to take advantage.

An example, Lindsay said, is requiring any purchase over $100 to be approved by three people. He said receipts should always accompany approved purchases.

When it comes to sniffing out suspicious activity, Lindsay posed a couple hypothetical questions for agencies to consider: Is your treasurer suddenly working off-hours? Is the person suddenly spending more money?

Acknowledging that this can easily brood an uncomfortable atmosphere, Lindsay described the temptation to commit crimes like these "everybody's issue," not unlike drug addiction or gambling. Equally tempting, he added, could be avoiding the tough questions altogether.

"It's trust," he said, "it's difficult to overcome."

'Not regular criminals'

Even when victims of fraud get some of the money back, it doesn't always come in one fell swoop.

Glen Aubrey Fire Chief Gary Smith recently described a grueling three-year waiting game in the wake of such an ordeal. And it's not over.

Terry L. Gow, who formerly served as fire company treasurer in Glen Aubrey, admitted in Broome County Court she stole its funds from Dec. 1, 2008 to Dec. 24, 2013, because she had financial problems. In May 2014, she pleaded guilty to a felony count of third-degree grand larceny, in exchange for five years of probation, and was required to pay $58,000 in restitution.

After three years and scattered court-ordered payments, the fire company is still waiting for about half of its owed restitution, according to Smith.

"We had to work our way up," Smith said Tuesday, referring to numerous fundraising attempts over the years since the embezzlement was uncovered in January 2014.

The investigation had opened that same month, when the M&T Bank branch in Whitney Point told the Glen Aubrey fire company its accounts were empty, according to a police report.

When fire company officials asked Gow about the missing funds, she admitted taking the money. She said she would buy items such as sodas out of her own pocket and also charged some purchases for the fire department to her personal credit card.

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Terry Gow walks out of Broome County Court on May 29, 2014, after pleading guilty to a felony count of grand larceny.(Photo: JASON WHONG / STAFF PHOTO)

Since then, Smith said, the fire company has performed an overhaul on its money management.

Monthly treasurers' reports — they've become more comprehensive, from three pages to eight pages — are examined by the fire company officials, he said, and no cash transactions are allowed for company funds. Dual signatures are also mandated for any bank transaction.

"It's not just set down to once a year; any time we've got a question, our treasurer can take it to our accountant and run it through and check to see whether everything's how it's supposed to be," Smith said. "We amplified all the security measures that we could."

Still, he added, Glen Aubrey's fire company is owed about $31,000 from the restitution payments. Those payments are coordinated through the county's probation department.

Smith's advice to other similar organizations: Put safeguards in place now and protect your money.

For prosecutors, cases such as Glen Aubrey's lost fire company funds also illustrate a dilemma associated with fraud cases: Vetting an appropriate punishment against working toward the victim's simple desire to get the money back.

For a different case, in 2014, a Vestal woman's embezzling more than $50,000 from Ernest Parsons Funeral Home in Binghamton drew a prison sentence of 2 to 6 years. When Helen Eickhoff was sentenced in November 2014, none of the money had been paid back.

When the stolen funds can't be repaid as easily as they were taken, Smith said, it leaves victims with a sense of helplessness in spite of any resolution reached in the courtroom.

"These people have got to learn; they're not regular criminals and they think they'll get a slap on the hand," Smith said. "But if you put the fear of God in their hearts ... these people are going to find out, 'If I think I'm going to get away with this, I'm not.'"

But in cases where the defendant is able to repay the money, Cornwell said, that can become an important factor to consider in deciding how the case gets resolved.

"We don't want to encourage people to steal," he said, "but if you're going to make the victim whole, make the victim whole."

Based on Press & Sun-Bulletin archives, here are some tips from experts to prevent fraud and embezzlement:

Separate financial duties —Experts suggest having as many people as possible, whether paid staff or board members, involved in approving everything from checks to fiscal reports.

Adopt conflict-of-interest and whistleblower policies — Experts suggest having such policies, that members of the governing board should be appointed to periodically review the policies and investigate any issues. The full board also should be involved in the process.

Hire an independent auditor —Experts believe independent audits are among the best ways to discourage and catch thieves. They also emphasize the importance of having the entire governing board review audit findings, whether they are annual or on a more frequent basis.

Recruit people with skills — Nonprofits should always try to build governing boards drawing from a diverse background. They suggest approaching people with backgrounds in everything from law and finances to management and human resources.